Bitcoin Short Bets Are Building – Here’s What That Means for the BTC Price

cryptonews.com:

Short Bitcoin investment products saw an inflow of nearly $10 million last week, according to CoinShares’ latest Digital Asset Fund Flows Weekly Report. That took month-to-date flows to $14 million. Meanwhile, over the same time period, long Bitcoin investment products saw an outflow of close to $12 million, taking month-to-date outflows of $16.8 million.

Ethereum, Litecoin, Solana, Polygon, Multi-asset and other cryptocurrencies saw their related investment products saw net flows of close to zero, highlighting how recent pessimism has been largely concentrated on Bitcoin. In terms of flows by region, the US saw outflows of nearly $14 million. “We believe this reaction reflects nervousness amongst US investors prompted by the recent stronger than expected macro data releases, but also highlights its sensitivity to the regulatory crackdown in the US”.

A string of much stronger-than-expected US data releases this month, including the likes of the January jobs and ISM reports, as well as the January CPI and Core PCE inflation reports, has markets betting on significantly more tightening from the Fed this year than this time last month. As per money market data presented by the CME, the market’s new base case is that rates reach nearly 5.5% before the end of H1 this year. One month ago, markets had been expecting rates to peak in the 5.0% area.

Larger scale investors, who tend to utilize crypto investment products more heavily than retail investors, have clearly turned more pessimistic, particularly in the US amid growing macro headwinds. But Bitcoin’s ongoing resilience is impressive, with the world’s largest cryptocurrency last changing hands in the low $23,000s, still up over 40% for the year and still slightly in the green